Baja Mining lays off 40% of staff and seeks funding for Boleo

Troubled Vancouver miner, Baja Mining (TSE:BAJ), said that it laid off 40% of its staff to conserve cash and admitted that there is "no assurance" that it will find funding to complete its Boleo project, a $1.143 billion copper-cobalt-zinc project in Mexico.

Today Baja Mining traded at a three-year low of 21 cents a share.

Two months ago Baja surprised investors when it announced that the Boleo project would cost $1.143 billion, a 21.5% increase over the original estimate of $890 million.

In a statement the company discussed its financing difficulties.

"While there is encouraging activity, there can be no assurances that Baja will be successful in finding requisite financing to complete the Boleo Project," said the company in a news release.

"The funding for cost overruns required under the project's financing documents is unlikely to be obtained by the mid-June 2012 deadline, and accordingly Baja is seeking a standstill or waiver from its project lender for sufficient time to enable the necessary diligence to be completed and a realistics financing plan for the Boleo Project to be completed."

Baja Mining says as of May 28, 2012 it directly held US$27 million in cash and cash equivalents. About half that money is due to be paid to the Boleo project at the end of June.